Occupational licensing makes these 6 services more dangerous for consumers

Jun 1, 2019 by AFP

Many states have laws on the books that require people in certain professions to obtain a costly and time-consuming government occupational license to perform their job.

This permission slip from the government is intended to protect consumers — but that often isn’t the case.

Government occupational licenses frequently bar would-be participants from the market. They ensure that those who hold licenses are protected from the competition of those who don’t yet possess them. This creates an uneven playing field. What’s more, these unnecessary licenses make consumers less safe.

Here are six occupations that government licensing makes less safe for consumers:

#1: Dentistry

That may seem counterintuitive. But think of it this way: When dental hygienists are required by the government to be licensed, the cost and time needed to acquire that license keep many from being able to join the workforce and serve patients.

Fewer people are able to become dental hygienists. Costs for their services go up from a lack of competition. And when costs go up, people who require dental work may choose to go without it. That leads to poor dental health outcomes.

#2: Electrical Repair

Studies show that the same phenomenon occurs in when the government requires licenses for electricians.

While private training and credentials may be valuable, a government licensing regime for electricians means there will be fewer qualified electricians. Fewer electricians means that costs for electrical repair will be artificially high.

When costs are high, more people will be enticed to do their own electrical work. This is dangerous, of course. Because of these licensing laws, accidents increase, not decrease.

#3: Private Security

We know that greater licensing requirements for dental hygienists leads to less dental hygiene. And we know that greater licensing requirements for electricians leads to more accidents.

It’s no surprise, then, that greater government licensing requirements for security guards leads to less security. Greater barriers to entry in the field of private security reduce the number of security guards available.

The results are predictable.

In states where barriers to entry are higher, crime increases. These states see greater incidences of burglary, larceny, robbery and other property crimes.

#4: Optometry

Given what we know about other government occupational licensing laws, it should come as no surprise that states with greater barriers to entry for optometrists have higher rates of blindness.

The Federal Trade Commission made note of this problem in a response to the Connecticut Board of Examiners for Opticians’ 2002 proposal to require stand-alone contact lens sellers to obtain a license.

“[Such a requirement] would likely increase consumer costs while producing no offsetting benefits,” they wrote. They also mentioned that it “could harm public health by raising the cost of replacement contact lenses, inducing consumers to replace the lenses less frequently than doctors recommend.”

#5: Mortgage Brokers

A study by the National Bureau of Economic Research found that strict bonding and net worth requirements from the government for mortgage brokers, in order to obtain a license, create poorer outcomes for those who solicit their services.

The study found that these requirements lead to, among other things, fewer brokers, higher foreclosure rates and a greater number of high interest rate mortgages.

#6: Veterinarians

In states where barriers to practicing animal care are higher, fewer practitioners are able to enter the field. As with the other professions listed above, that practitioner deficit leads to worse health outcomes for pets. The result of a stricter licensing regime in veterinary services is an under-discovery of disease, putting animals and people at risk.

While greater government licensing requirements are intended to protect consumers, they often produce the exact opposite result.

Licensing requirements put up barriers for individuals wanting to provide much-needed services and often create a false sense of security for consumers. In fact, voluntary certifications and other private-sector solutions are more effective at protecting the public’s health and pocketbooks.

As a result of burdensome licensing, costs go up and harm consumers.

Sign the petition to urge lawmakers to scrap these unnecessary laws. Doing so would make people safer.